Sunday, May 10, 2009

McKesson drug pricing settlement

There has been a settlement in a drug pricing class action against McKesson Corporation and other defendants that has been pending in the federal district court for the District of Massachusetts. (http://www.mckessonawpsettlement.com/index.htm)

The notice describes the tenor of the class action as follows:

Prescription drugs often are priced using certain benchmarks. The most commonpricing benchmark is called the Average Wholesale Price ("AWP"). AWP is oftenused in determining how much insurance companies and other Third-Party Payorswill reimburse for these prescription drugs and the co-payment price that someconsumers pay for them. The lawsuit claims that two Defendants, McKessonCorporation ("McKesson"), a large drug wholesaler, and First DataBank ("FDB"), apublisher of drug data, wrongfully inflated the mark-up factor used by FDB todetermine the AWP for certain prescription drugs ("Subject Drugs"). The lawsuit claims that, as a result, many drug purchasers overpaid for these drugs. Both FDB and McKesson deny any wrongdoing.

Under the Settlement Agreement, it appears that McKesson will pay into the Settlement Fund $350,000,000 and McKesson will not object to attorneys' fees for the plaintiffs' lawyers to the extent they do not exceed 30% of the Settlement Fund.

Objections must be filed with the Court by June 8, 2009.

I don't believe I am a member of the plaintiff class. This type of class action litigation that goes on significantly affects the public as a whole, and I propose to attact it as a member of the public.